Yesterday’s housing finance data for January, released by the Australian Bureau of Statistics (ABS), contained some good news with the number of finance commitments for new dwellings and construction increasing by a seasonally-adjusted 0.6% over the month and by 9.3% higher over the year, to be tracking just above the 5-year moving average (5YMA):
The recovery is even more obvious when the data is plotted on a rolling annual basis, which shows a clear pick-up in commitments over the past year (see next chart).
The recovery in finance commitments for new dwellings and construction appears to have been driven by big gains in Western Australia, although all states have experienced increases on a rolling annual basis (see next chart). Note, rolling annual figures have been used as the state-based data is not seasonally-adjusted, therefore, monthly comparisons are affected heavily by seasonality, which makes comparisons problematic.
While it’s probably too early to tell, the changes to first home buyer (FHB) incentives in New South Wales and Queensland aimed at boosting new home construction appear to have had mixed success, with New South Wales registering a solid pick-up in finance commitments for new dwellings and construction since the changes were implemented in October, whereas Queensland has experienced small falls (see the above chart).
Overall, the data seems to conform with the recovery taking place with respect to dwelling approvals and new home sales, which are showing modest improvement from highly depressed levels.